Well, this week, the interest rates on the small savings schemes are going to be revised. Hence, one such scheme is Kisan Vikas Patra (KVP). This was initiated in the year 1988 by India Post.
Notably, the instrument is supported by the government. The KVP currently offers 6.9 percent per annum interest on savings and has a maturity period of 10 years and 4 months (124 months in total). The amount invested in the scheme doubles during the maturity period.
Again, the scheme can be enlisted by any Indian adult in his name or on behalf of a minor and three adults jointly. It further can be benefited of at post office branches as well as online. For online, one needs to visit the India Post website or login into internet banking. Select ‘Kisan Vikas Patra (KVP)’ and download the KVP Form A. After filling it, submit it along with documents to the bank/ post office along with the KYC documents.
Depositors can invest a minimum of Rs 1,000 and any sum in multiple of Rs 100 may be deposited in an account. There is no maximum limit for the purchase of the certificates. Though Kisan Vikas Patra was first launched in 1988, it was relaunched in 2014 with several changes comprising mandatory PAN card proof for investments over Rs 50,000 and income source proof for investments exceeding Rs 10 lakh.
However, no income tax benefit is usable under the scheme. The deposits are exempt from Tax Deduction at Source (TDS) at the time of withdrawal. Though the scheme has a maturity period of 124 months, certificates can be encashed after two and a half years (30 months) from the date of issue.
Non-resident Indians are not eligible to purchase Kisan Vikas Patra as there is no such provision in the rules. The Karta on behalf of the Hindu Undivided Family is also not eligible to purchase Kisan Vikas Patra as there is no such provision in the rules.
Interest rates on small savings schemes, including PPF, Sukanya Samriddhi Yojana, and Senior Citizens Savings Scheme, have remained unchanged since the first quarter of 2020-21. Now, as the interest rates are rising in the country, saving instruments like fixed deposits (FD) are offering increased rates than earlier. The interest rates on small savings schemes will be reviewed by the end of this week, for October-December 2022.
Interest rates on small saving schemes are reviewed every quarter. The revision happens in line with the movement in benchmark government bonds. The interest rates for October-December 2022 will be decided by the end of this month.